Tim Harris, founding director of Real Change, spoke before the city council repealed the head tax.
Tim Harris, founding director of Real Change, spoke before the city council repealed the head tax. SH

The head tax killed by City Council today wasn’t set to actually start bringing in revenue until 2019. Still, homeless service providers say the move amounts to a loss of funding that could have helped alleviate a worsening crisis.

“Mayor Jenny Durkan has said that she is going to increase number of emergency shelter beds this year by 500,” Real Change Director Tim Harris said ahead of the vote. "I have two questions for her. The first is: Where is the money for that going to come?”

Durkan last month announced an “ambitious” plan to expand emergency shelters and tiny house villages to serve people currently living outside. This year, the expansion will be funded by the sale of a city-owned land in South Lake Union. But that sale will only bring in one-time money, meaning the shelter beds will need another source of funding to stay open beyond December.

According to the city budget office, operating the new beds in the future would cost $8.75 million per year. When she announced the plan, Durkan said her office plans to “keep this capacity online,” but offered no clear plan for where the money would come from. One possibility was the head tax, which the council repealed with Durkan’s support.

“You have just made finding any kind of progressive tax solution a lot harder,” Harris, from Real Change, said. “Show me a progressive tax and I’ll show you a tax that the business community is going to hate and fight tooth and nail. So, where is that money going to come from if we don’t have the courage to take it?” (Harris’s second question: “Is this another empty promise? You were on our side a month ago. What happened?”)

Daniel Malone, executive director of the Downtown Emergency Service Center, also questioned where the city will find the money to fund those beds in 2019 and beyond. "I’ll be eagerly waiting to hear from the city,” he said. Durkan’s shelter bed plan will save 163 DESC beds previously set to be defunded. Sharon Lee, executive director of the Low Income Housing Institute, which will get funding for new tiny houses under Durkan’s plan, said she assumes future funding will come from the city’s general fund.

Stephanie Formas, a spokesperson for Durkan, said the mayor will explain future funding when she releases her full 2019 budget proposal this fall. The mayor is currently "focused on evaluating the results of the city’s investments in prevention, emergency services, and housing to ensure the City is effectively using its resources to move people into safer places then permanent housing," Formas said.

Even as the city council unanimously passed the employee hours tax, also known as the head tax, last month, it wasn’t clear exactly how the money from the tax would be spent. However, the council did approve a nonbinding resolution laying out a spending plan.

Under that plan, the majority of the money would have gone toward building 591 units of permanent supportive housing over five years. It would also have funded rental housing subsidies for low-income people, shelter beds, and sanitary services like showers, laundry, and garbage pickup for people living outside and in their cars. Durkan and some other council members argued the funding should focus more on shelter in order to make an immediate dent in the visible problem of unsheltered homelessness. That dispute was set to be resolved during fall budget deliberations.

“It’s sort of ironic because the business community wants to see an appreciable difference on the streets," says Lee, from LIHI. "Well, the head tax was going to make a big difference.”

Council members acknowledged Tuesday there is no backup plan. The council also used one-time funding last fall for homeless services, after council members rejected another business tax proposal.

“We have a significant budget hole to fill with today’s vote,” said Council Member Lisa Herbold, who supported the tax but voted to repeal it because she said she believed it would fail on the ballot.

About 12,000 people are currently experiencing homelessness across King County, more than half of them unsheltered, according to the latest point-in-time count. The overall total is a 4 percent increase from last year; the unsheltered count is up 15 percent. According to the King County Medical Examiner's Office, a record-high 169 people died while homeless in 2017.

Permanent supportive housing, like that the council proposed building with the head tax, includes onsite services for formerly homeless people.

People wait months to access supportive units, says Julie Nordgen, a project assistant at the Morrison Hotel, a 190-unit DESC supportive housing project. The facility offers people with psychiatric and physical disabilities housing, case management, and 24-hour support.

“All types of people deserve housing and we’ll never get them off the streets if there’s nowhere for them to go permanently,” Nordgen says.

The passage of the head tax in May was “really exciting” for DESC employees who usually face a lack of resources for new projects and services, Nordgen says. “To defund our organizations is not going to help. It’s not going to keep people off the streets. You’re still going to see them in your neighborhoods.”